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Related Experiment Videos

How expenditure caps and expenditure targets really work

W A Glaser1

  • 1Graduate School of Management and Urban Policy, New School for Social Research, New York, NY 10011.

The Milbank Quarterly
|January 1, 1993
PubMed
Summary

Implementing expenditure caps and flexible targeting systems in healthcare requires negotiation and cooperation between medical professionals and payers. Successful cost containment relies on a harmonious decision-making system, not just formulas.

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Area of Science:

  • Health Economics
  • Healthcare Policy
  • Public Health

Background:

  • Healthcare systems face challenges in cost containment while maintaining benefit quality.
  • Traditional fixed expenditure caps are often resisted by medical professionals.
  • Negotiated financial arrangements, including flexible targets, are increasingly common.

Purpose of the Study:

  • To analyze the effectiveness of different cost containment strategies in healthcare payment systems.
  • To examine the role of negotiation and cooperation between medical associations and payers.
  • To evaluate the potential of all-payer systems for universal health insurance.

Main Methods:

  • Review of international healthcare payment systems and their cost control mechanisms.
  • Analysis of negotiated settlements between medical professions and government payers.

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  • Examination of the implementation and outcomes of expenditure targeting systems.

    • Main Results:

    • Flexible expenditure targeting systems, though complex, can succeed with medical professional cooperation.
    • Medical associations historically resist cost restraints but accept them through negotiation.
    • An all-payer system is proposed as the most effective method for universal health insurance cost containment.

    Conclusions:

    • Successful healthcare cost containment necessitates collaborative decision-making systems involving all stakeholders.
    • Government regulation alone is insufficient; negotiation and physician buy-in are crucial.
    • International experiences offer valuable lessons for designing effective universal health insurance systems.